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Editorial Articles

volume-36 , 07-13 December 2019

Employment Potential of Micro & small enterprises


Dattatraya Aumbulkar

MSME sector in India has tremendous potential to push growth and generate employment. The government's priority is for an integrated development of the rural and agro based enterprises along with the urban based enterprises. The target is to increase MSME’s present share of 29 percent of GDP to 50 percent in next five years and raise its export contribution from 49 percent to  60 percent. To achieve these targets logistics, power and capital cost will need to be reduced. Micro and Small scale Industries are labour intensive and have huge scope for employment generation.

A slew of initiatives have been taken to tackle issues related to MSME sector in the country. The union budget 2019-20 has given stress to Micro- Small- Medium Enterprises (MSME) and Start-ups.

The concept of Business Score Card customized to such units can make specific and time bound business impact. It is pertinent  to know that the compact set up of MSMEs and Start up calls that every entrepreneur who ventures or intent to venture into such business initiatives, need to have nothing less than success. This is most vital as the stakes are high in the challenging scenario.

Implementation of the Score Card would enable the MSME units to frame and formulate the policies keeping in view their business purpose, set up, market standing and execution of the business model.

The speciality of MSMEs is in their small size and flexibility in operation.

Very often it is seen that the entrepreneur prefers to invest the limited but requisite amount of finance from their own funds. This provides the ease but at the same time can also lead to getting the self-earnings stuck  in the business cycle and can become risky.

It is therefore essential that financial need has to be met with the support of  institutional funding, and ensuring cash flow availability on a periodical basis. Proper planning and judgemental aptitude would help the small businessmen.

Like every commercial venture, the MSME also calls for the specific and customized business model based on its business needs and objectives and customers' requirements.  The units which are backed up by such specific business model would certainly be successful.   

The premise of incorporating and inception of MSME and Start up needs to be contributing to the business as well as employment. The value addition factor based on the uniqueness, is essential for the success of such business.

The service delivery of MSMEs and Start up should not only be customer centric and focused on quality. The success factor of MSME lies in such determined business resolution and result orientation.

The entrepreneur needs to achieve these aspects by creating the customer focused work culture , imbibe it as the way of working with zero dilution and with the determination of self as well as with involvement of the limited number of employees.  One should remember that there is no substitute to determination and commitment at workplace in such units. Moreover, all the critical aspects related MSME should be measureable and should be timely monitored.

In order to make every MSME and Start up customer-centric, customer - focused and service driven, quality based work culture is always helpful. The limited number of employees and the small size of such units plays vital role in making this happen. Most of the MSMEs are directly driven by the   entrepreneurs or owners and their direct involvement is also found supportive to create and implement such requisite work culture and it can become the success factor.

The government is in the process of developing a digital MSME portal which will work as a virtual meeting place for all stakeholders of the sector. For the  over 75 lakh MSMEs currently registered, this will provide a platform where they can interact globally to fulfil their requirements for funding, knowledge, technology, skilling and  marketing, making them more competitive and integrated with the global value chain. There is need to enhance manufacturing competitiveness of entrepreneurs,  the process is on for opening new 135 new Tool Rooms & Technology centres to develop the skill of the entrepreneurs.

While addressing the Global MSME Conference, 2019 held in Delhi in June this year, the Union Minister of MSME Mr Nitin Gadkari in his  speech,  mentioned that the country has got about 6 Crores  MSME employing around 11 Crore persons. The government has a plan to raise the employment potential to 14 Crores and raise the current rate of 29% GDP to 50 % in next 5 years span.

As per the 73rd Round of National Sample Survey (NSS), conducted by National Sample Survey Office, Ministry of Statistics & Programme Implementation during the period 2015-16, the estimated number of workers in unincorporated non-agriculture MSMEs in the country engaged in different economic activities excluding the MSMEs registered under (a) Sections 2m(i) and 2m(ii) of the Factories Act, 1948, (b) Companies Act, 1956 and (c) Construction activities falling under Section F of National Industrial Classification (NIC), 2008, are 11.10 crore.

Under the Prime Minister’s Employment Generation Programme (PMEGP,) the estimated employment generated (number of persons) in micro enterprises during the years 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19 are 3.58 lakhs, 3.23 lakhs, 4.08 lakhs, 3.87 lakhs and 5.87 lakhs, respectively.

MSME sector remains the highest job creator in our economy and a dedicated focus on MSMEs can create huge employment opportunities with less capital.

E-mail: Dattatraya.ambulakr@gmail. com

Views expressed are personal

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